Chili's Parent Brinker Raises Full-Year Outlook After Strong Second-Quarter Results

Brinker International, Inc. (NYSE: EAT), the parent company of Chili's Grill & Bar and Maggiano's Little Italy, reported strong second-quarter fiscal 2025 results and raised its full-year outlook, reflecting the company's confidence in its recent performance and future prospects. The company's shares soared to an all-time high after the earnings release, indicating investors' enthusiasm for Brinker's growth trajectory.

Strong Second-Quarter Results

Brinker reported adjusted earnings per share (EPS) of $2.80, surpassing analysts' expectations of $1.86. Revenue jumped nearly 27% to $1.35 billion, also exceeding the Street's forecast of $1.25 billion. The company's operating income margin increased to 11.5%, and restaurant operating margin (non-GAAP) rose to 19.1% for the second quarter. These strong financial results demonstrate the effectiveness of Brinker's strategic focus on improving fundamentals and enhancing the guest experience.

Accelerating Comparable Restaurant Sales

Comparable restaurant sales soared 27% overall, driven by a 31.4% gain at Chili's. Brinker noted that Chili's sales growth came from a 19.9% increase in traffic, generated by investments in advertising behind industry-leading value that brought guests in and operational improvements that brought guests back. Maggiano's Little Italy comparable restaurant sales were 1.8% higher. This acceleration in comparable restaurant sales indicates that Brinker's efforts to attract new guests and retain existing ones are successful.



Raised Guidance

Brinker now expects adjusted earnings in the range of $7.50 to $8.00 per share and total revenues in the range of $5.15 billion to $5.25 billion for fiscal 2025. This represents a significant increase from the company's previous guidance of adjusted earnings in a range of $5.20 to $5.50 per share on total revenues between $4.70 billion and $4.75 billion. This raised guidance suggests that Brinker is confident in its ability to maintain and build on its recent momentum.

Key Factors Driving Optimism

Several factors contribute to Brinker's optimism and raised guidance:

1. Improving fundamentals: President and CEO Kevin Hochman credited the strong performance to the company's improving fundamentals, which continue to drive a better guest experience and sustained business results.
2. Investments in advertising and operational improvements: Brinker's investments in advertising behind industry-leading value and operational improvements have been effective in driving sales growth for Chili's.
3. Sustainable initiatives: The long-term sustainability of these initiatives depends on maintaining the quality and consistency of the guest experience, the effectiveness of ongoing advertising campaigns, and the company's ability to adapt to changing consumer preferences and market conditions.
4. Strong second-quarter results: Brinker's higher-than-expected earnings and revenue for the second quarter indicate that the company's recent strategies and initiatives are paying off.

In conclusion, Brinker International's strong second-quarter results and raised guidance reflect the company's confidence in its recent performance and future prospects. The key factors driving this optimism include improving fundamentals, investments in advertising and operational improvements, and sustainable initiatives. As Brinker continues to execute on its strategic focus, investors can expect the company to maintain its momentum and deliver strong financial performance.